Mortgage relief & assistance FAQs

Are lenders required to perform an escrow analysis when completing a Loan Modification?
Yes, lenders perform an escrow analysis to determine the exact escrow payments prior to the establishment of the trial period payment, taking into consideration the tax and insurance payments that may come due during the trial period.
Are there any fees associated with a loan modification?
There is no fee for a loan modification. However, you may be responsible for expenses that PennyMac has incurred as a result of your default, including attorneys' fees, foreclosure fees and costs, property inspection fees, and property preservation costs, all of which are authorized under your loan documents.
How may a repayment plan affect my credit?
A repayment plan may have a negative impact on your credit score. While on a repayment plan, your account will be reported to the credit agencies as "Paying under a partial or modified payment agreement." Once the plan is successfully completed, your account will be reported as current.
I've made all my payments during the trial period; what happens next?
To be approved for a permanent loan modification, you must: Successfully complete your Trial Period Plan, complete housing counseling if you have been asked to do so, and return any additional required documentation in a timely manner. After you're approved, you'll receive a letter and Modification Agreement defining the changes to your home loan. You will need to sign the Modification Agreement in front of a notary and return the notarized executed agreement as soon as possible to PennyMac. Your modification only becomes permanent after PennyMac receives the executed agreement. Until then, we strongly encourage you to continue making payments in the same amount you paid during your trial period. Please note: Once your loan is permanently modified, your new monthly payments could be higher than your Trial Period Plan payments.
May a lender include late charges in the Loan Modification?
PennyMac waives all accrued and unpaid late fees as part of a permanent loan modification.
Payment Assistance
If you experience any financial hardship from a disaster or property damage, please contact our Customer Service Department at (800) 777-4001 so that we can discuss all options available to assist you with your mortgage payments. Our office hours are Monday - Friday, 6am-6pm and Saturday, 7am-11am Pacific Time.
Property Damage
If your home was damaged, contact your homeowner's insurance company as soon as you can to begin the claim process. Then, give us a call at (866) 314-0498 to go over the claim process including any pertinent documentation you may need to provide. Our office hours are Monday - Friday, 6am-6pm and Saturday, 7am-11am Pacific Time.
Should I hire someone to help me negotiate a modification?
There is never a fee to get assistance or information about modification programs from PennyMac or a HUD-approved housing counselor. Beware of any person or organization that asks you to pay a fee in exchange for housing counseling services or modification of a delinquent loan. For a HUD-approved housing counselor, visit:
What are my options for a modification and where is the best place to start?
PennyMac offers a number of modification options. These programs are designed to address a variety of circumstances. When you contact us to discuss your situation, we will evaluate your financial information to see if there are loan modification programs available to you, which would allow you to stay in your home and avoid foreclosure. Each program has its own method of modifying loans and its own criteria for which loans are eligible. The federal government and the investors/owners of the loans we service set their own guidelines and requirements for their respective programs. We're here to help you find potential solutions.
What are the basic eligibility requirements for a loan modification?
A modification may be an option if: You are ineligible to refinance, you are facing a long-term hardship, your monthly mortgage payments are no longer affordable, you are behind on your mortgage payments or likely to fall behind soon, and/or you have the willingness and ability to make reasonable monthly mortgage payments.
What can I do to be considered for a repayment plan?
You can contact PennyMac today to speak with a representative who can determine if you pre-qualify for a repayment plan or other home retention option. Be prepared to discuss the reason for your temporary hardship. Be able to provide verbal financial information concerning your current income and expenses.
What if I didn't include my property in my bankruptcy?
Your assets become part of the bankruptcy estate regardless of whether the loan is current or delinquent. We encourage you to consult with a bankruptcy specialist for advice about how your bankruptcy filing impacts your mortgage loan.
What if I do not qualify for a loan modification?
Depending on the timing, we will try to work with you on another loss mitigation option, which may involve considering relocating to a more affordable home.
What if my loan is currently in foreclosure?
A repayment plan may still be an option for you, even if you are currently in foreclosure. Successful completion of your repayment plan may help avoid a foreclosure sale while giving you time to bring your loan current.
What is a forbearance plan, how can I be considered, and how will it affect my situation?
You can send your proof of insurance to PennyMac via the secure Message Center in your account: Create or locate a copy (PDF format preferred) of your insurance policy declaration page. Visit the secure Message Center of your online account. Compose and send a message with the insurance declaration page as an attachment. As soon as your information is updated in the system, you will be able to view your updated information by visiting the Escrow section of your online account.
What is a loan-to-value ratio, and how might it affect me?
A loan-to-value ratio is how much money you owe on your mortgage in relation to how much your property that secures the mortgage is worth. It is calculated by dividing the remaining loan amount (numerator) by the property value (denominator). It can be used, in conjunction with other criteria, as an indicator for eligibility for some modification programs or removing mortgage insurance.
What is a repayment plan, and how can it help my current situation?
A repayment plan allows you to catch up on your missed payments over time, while continuing to make your current payments. If you qualify for a repayment plan, we can spread your past-due amount over an agreed upon term, and add it to your current monthly mortgage payment in order to bring your loan current. By exploring a repayment plan option, you are working on finding a solution to your temporary hardship, so it does not have long term effects. No further late charges will be assessed on your loan while on your plan, as long as you timely make each of your repayment plan payments.
What is a trial modification or trial plan, how does it work, and what happens if I don’t successfully complete the trial plan?
The purpose of the Trial Period Plan is to show that you're willing and able to make the modified monthly payments. The trial period lasts a minimum of three months. If you qualify, we'll send you a Trial Period Plan Notice explaining the terms and amount of your payments. It will be based on our estimate of what your monthly payments would be with a permanently modified loan. Your Trial Period Plan becomes effective when you make your first trial plan payment. Payments can be made online using the One-Time Payment option on this website. You must make each Trial Period Plan payment in a timely manner, in the amount specified in the notice, in order to receive a permanent modification. If your original loan payment doesn't include amounts to pay your property taxes and/or homeowners insurance, an escrow account will be created and those amounts will be added to your monthly payment. If you're unable to successfully complete the Trial Period Plan to receive a permanent modification of your mortgage, you may need to consider options that involve relocation to a more affordable home. If your home is currently worth less than the amount remaining on your loan, you may be able to either sell your house through a short sale or sign over title to your home to your lender through a deed in lieu of foreclosure. These programs usually include relocation assistance payments to help you move to a more affordable home.
What is foreclosure and what are the different types?
A foreclosure is the process of taking title to a mortgaged property as a result of the borrower's failure to make mortgage payments. Depending on the state, the most common types of foreclosure are judicial foreclosure, which is processed through the court system, and non-judicial foreclosure or power of sale, which is conducted through a trustee without the court's involvement. Once foreclosure is commenced, there may be additional attorney or trustee fees and costs added to the loan balance. Foreclosure time frames leading up to foreclosure sale vary by state. Prior to a foreclosure sale date, the full amount to cure the default is required to cancel pending foreclosure proceedings. Once a foreclosure sale takes place, there may be no additional opportunity for the borrower to regain rights to the property.
What is my loan is currently in foreclosure and when does the foreclosure process start?
A forbearance plan may still be an option for you even if you are currently in foreclosure. Typically, a loan is referred to foreclosure at or around the 120th day of delinquency unless the loan is being evaluated for a loan modification or other foreclosure prevention program.
What should I do if my loan is scheduled for foreclosure?
If you're in foreclosure proceedings, or your home has been scheduled for a foreclosure sale, contact PennyMac immediately, if you haven't done so already, so we can discuss your available options. We want to help you keep your home. We may not be able to offer assistance to you if you wait until a foreclosure sale is imminent or already took place. You may also want to take advantage of HUD-approved housing counseling services. You can call the Home Owners Preservation Foundation hotline at (888) 995-HOPE, to speak with a HUD approved Housing Counselor in your community. In order to protect your rights under applicable foreclosure law, it's important that you continue to respond to any foreclosure notices you may receive. If you don't understand the legal consequences of foreclosure, you're also encouraged to contact a lawyer or housing counselor for assistance.
What type of information must I provide to apply for a loan modification?
If you would like to apply for a loan modification, you will need to complete an application that provides details about your income and expenses, and provide, among other things, income documentation (e.g. pay stubs, bank statements, profit & loss statement), tax returns, and a hardship letter with a reason why you are requesting a loan modification.
Why is there no credit reporting on my discharged Chapter 7 Bankruptcy?
When you receive a discharge in bankruptcy, you are no longer personally liable for the debt. Your account will be reported to the credit bureaus with a $0.00 balance. However, if you do not make your loan payments, your property may be the subject of foreclosure proceedings.
Will my credit be affected by accepting a trial period plan or a loan modification?
Yes. Staying current on your payments is the best way to protect your credit. If you enter into a modification, your credit may be negatively affected. Your loan will be reported as paying under a partial payment plan during the trial period, and as modified after the final modification agreement is signed, notarized, and returned. In addition, if you're behind on your payments when you start your trial, your loan will continue to be reported as "delinquent" until your loan has been permanently modified, even if you're making your trial payments. Credit scores are determined by a customer's credit history and are not controlled directly by PennyMac. Our commitment is to accurately report the status of all our customers.